Interim Management Statement

RNS Number : 9963K

Pendragon PLC

29 April 2010

 



Interim Management Statement

This Interim Management Statement by Pendragon PLC covers the period from 1 January 2010 to 28 April 2010.  Unless otherwise stated, figures quoted in this statement are for the three months ended 31 March 2010.

Current trading for the three months ended 31 March 2010

·    Q1 aftersales profitability has improved by 3.9% year on year

·    Q1 used car sales were up by 14%, with margins up 12%

·    Used car margins expected to remain stable and used car volume expected to grow during the year

·    Excluding scrappage, Group new retail car sales were up 4.3%, outperforming the market, which fell 1.5%, excluding scrappage,  in Q1

·    Premium car sales continue to demonstrate the "V" shaped recovery profile

·    We are cautiously optimistic about the prospects for 2010 and expect profitability to be in line with expectations.

Aftersales activities continue to represent the most profitable activity for the group.  During the first quarter of the year we are pleased to report that our UK aftersales profitability has improved by 3.9% over the prior year. Excluding the profits generated from internal work, relating to the preparation of new and used vehicles for sale, aftersales profit was 2.3% behind the prior year.  This is aligned with our experience of the improving trend in the key aftersales segment that began in the third and fourth quarters of 2009.  We are encouraged by this result achieved despite the difficult weather conditions experienced in January impacting this quarter's performance.

For the three months to 31 March 2010 our used car volume was up by 13.8% with margins up 11.8%.  No national data for the first quarter of 2010 is currently available but we expect to see a recovery in market volume during 2010.  We remain confident that used car margins will remain stable and used car volume will grow during the year.

During the three months ended 31 March 2010, UK new retail car registrations grew by 37.8% and total new car registrations including fleet by 27.3%.  Excluding the additional volume from the scrappage scheme, retail registrations would have fallen slightly, by 1.5% in the quarter.  Excluding scrappage our total retail sales were up 4.3%.  Sales in our Stratstone premium business continue to demonstrate the "V" shaped recovery profile whilst our Evans Halshaw volume business demonstrate a more "U" shaped recovery profile.  Retail sales excluding scrappage were up 10.6% in Stratstone and in Evans Halshaw were up 2.1%.  New car margins have also been stronger resulting in a significant improvement in new car profitability compared with Q1 2009.

Outlook

We continue to focus on the Aftersales segment of our activities and growing this area of the business.  Used cars should continue to have stable margins and early indications are that volume will improve in the coming months as the economy eases out of the recession.   Within the new car sector, our Stratstone business has had a particular strong start to the year and this underlines our view of the "V" shaped recovery profile that we have previously reported.  We expect this trend to continue.  Our new car performance in our Evans Halshaw business was assisted by the scrappage incentive scheme and we therefore expect new car growth to be modest in the foreseeable future.   Across the business we continue to focus on maintaining our control on costs but without impacting our growth aspirations. 

The first quarter of this year has seen a continuation of the improvement in profitability that started in 2009.  We remain cautiously optimistic that this will continue during the year and that profitability will be in line with expectations.

We expect our balance sheet to be in line with our plan at half year and lender covenants comfortably achieved.

Enquiries:

Pendragon PLC	Trevor Finn, Chief Executive	Tel:	01623 725114
	Tim Holden, Finance Director
Finsbury	Rollo Head/Gordon Simpson	Tel:	0207 2513801

 

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